Investing assets entrusted by the government, Bank of Korea and public funds in the global financial market
The Korea Investment Corporation was entrusted with USD 117.1 billion following its establishment in 2005, and has a net asset value of USD 205.0 billion as of the end of 2020.
First entrusted with USD 1 billion in 2006, KIC has consistently expanded its operating scale through stable and capable management. Our assets under management (AUM) at the end of 2021 totaled USD 205 billion on the back of excellent investment performance, marking a 12% increase from 2020.
Following a principle of diversification, KIC manages a portfolio that is 82.5% traditional assets and 17.5% alternative assets, including private equity, real estate, infrastructure and hedge funds.
The AUM of our alternative assets, which have a low correlation with traditional assets and pursues relatively high returns, grew 29% (USD 8 billion) to USD 35.9 billion, corresponding to their growth in portfolio weight from 15.3% in 2020 to 17.5% in 2021.
(USD billion, %)
| Category | NAV | Asset allocation | |
|---|---|---|---|
| Total | 205.0 | 100.0 | |
| Traditional assets | Equities | 83.2 | 40.6 |
| Fixed income | 71.6 | 34.9 | |
| Other* | 14.3 | 7.0 | |
| Subtotal | 169.1 | 82.5 | |
| Alternative assets | Private equity | 15.7 | 7.7 |
| Real estate and infrastructure | 13.4 | 6.5 | |
| Hedge funds | 5.5 | 2.7 | |
| Cash equivalent | 1.3 | 0.6 | |
| Subtotal | 35.9 | 17.5 | |
(%)
| Category | 2020 | 2021 |
|---|---|---|
| Total | 100.0 | 100.0 |
| Equities | 42.7 | 40.6 |
| Fixed income | 35.2 | 34.9 |
| Alternative assets | 15.3 | 17.5 |
| Other | 6.8 | 7.0 |
(USD billion)
| 2017 | 2018 | 2019 | 2020 | 2021 | |
|---|---|---|---|---|---|
| Total assets* | 115.8 | 136.7 | 137.1 | 161.3 | 188.1 |
| NAV | 134.1 | 131.6 | 157.3 | 181.3 | 205.0 |
| Accumulated gains | 34.1 | 29.0 | 49.2 | 71.0 | 87.9 |
(USD billion)
KIC’s return on total assets in 2021 stood at 9.13%, with a five-year annualized return of 9.94% and an annualized return since inception of 5.47%.
(%)
| Category | 2017 | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|---|
| Return on total assets (before fees) |
16.42 | -3.66 | 15.39 | 13.71 | 9.13 |
| Return on total assets (after fees) |
16.26 | -3.80 | 15.21 | 13.52 | 8.94 |
| Annualized return since inception |
4.45 | 3.76 | 4.60 | 5.22 | 5.47 |
The return on traditional assets in 2021 was 6.75%, -39 bps compared to the benchmark.
| Category | 2017 | 2018 | 2019 | 2020 | 2021 | Annualized return for the past five years(’17-’21) | Annualized return since inception | |
|---|---|---|---|---|---|---|---|---|
| Total | Return (%) | 16.71 | -5.64 | 16.62 | 14.62 | 6.75 | 9.46 | 5.67 |
| Excess return (bp) | 129 | -81 | 33 | 144 | -39 | 32 | 22 | |
| Equities | Return (%) | 25.50 | -9.55 | 27.52 | 19.16 | 18.61 | 15.39 | 6.41 |
| Excess return (bp) | 122 | -71 | 6 | 261 | -92 | 39 | -1 | |
| Fixed income | Return (%) | 8.00 | -1.32 | 7.53 | 9.88 | -4.62 | 3.73 | 3.76 |
| Excess return (bp) | 72 | -13 | 73 | 78 | 39 | 48 | 33 | |
Annualized return since inception: 8.83%
* Total includes commodities (categorized as traditional assets since April 2011)
| Asset class | Benchmark |
|---|---|
| Equities | Morgan Stanley Capital International All Country World Index ex Korea (unhedged) |
| Fixed income | Bloomberg Barclays Global Aggregate Index ex KRW ex Korea (unhedged) |
| Inflation-linked bonds | Bloomberg Barclays Global Inflation-linked Bond Index |
| Cash | ICE BofA Merrill Lynch 3-Month US Treasury Bill |
| Private equity | Morgan Stanley Capital International All Country World Index ex Korea (unhedged) + 2%, 3 months lagged |
| Real estate · infrastructure | G7 inflation rate + 4%, 3 months lagged |
| Hedge funds | BofA Merrill Lynch 3-Month US Treasury Bill + 3.5%, 1 month lagged |